Making History

The Malta Independent - Friday Wisdom

Live concerts, wrist bands, t-shirts and other memorabilia work wonders to spike temporarily the world’s attention to the problem of poverty in Africa. Unfortunately they count for little by way of making a lasting contribution to really making poverty history.

G-8 meetings could be much more effective in making poverty history if the world leaders could raise above their immediate domestic electoral impact and act in a spirit of enlightened self-interest. In short, whenever world leaders meet as they are presently doing in Scotland, they need to bear in mind that in a world that is getting smaller and smaller it is not in their own interest that a whole continent is left behind.

Making poverty history is not a zero sum game. The resources that need to be shifted to get Africa out of its poverty trap do not mean reduction in resources leading to a commensurate drop in the standard of living in the developed world. Improved earnings in Africa will inevitably flow back to the developed world by way of orders for investment and consumption exports.

Yet unfortunately, enlightened self-interest is in short supply even among world leaders. Debt cancellation and increased flow of aid are obviously important and necessary to get African countries to the bottom of the development ladder. But on its own it would provide Africa with food for a day or two.

What Africa mostly from the rest of the world can be roughly divided in two. Firstly it needs fairer and more liberal world trade regime especially in agricultural produce, so as to gain access to world markets which are presently inaccessible due to unfair competition by subsidised agriculture produce of rich nations that is dumped on world markets at uneconomic prices. This will involve gradual dismantling of protective measures by the developed world which are currently obstructing access to their markets for agriculture produce of the developing world.

Secondly and more importantly Africa needs the developed world to teach it self-help. It needs world opinion to force liberalisation of their closed economies, enhancement of intra-Africa trade by dismantling of tariff and non-tariff barriers, and the development of African leaders who fight corruption and ensure that the benefits of aid and free trade reach those most in need in the form of better food, education and housing.

This can best be done by celebrating successes where they have occurred and rewarding countries like Uganda, Ghana, Brazil, Colombia. The Philippines, India and China who have recently been endowed with quality internal leadership that has up-graded their country’s capacity for self-help and translated successes into better standards of living for their people.

Somebody innocently asked me this week why Malta does not make an effort, given the economic problems we consistently talk about, to participate in the benefits of debt-cancellation which is being planned for the poorest countries. Quite apart from the fact we thankfully do not fall in the poorest category, we simply do not have external debt that could hypothetically qualify for such cancellation.

Monstrous in magnitude as much as it is, the bulk of our national debt is internal, meaning that we owe it to ourselves - the government owing it to individual savers directly or through the intermediation of the banking system. Forgiving debt we owe one another would involve shift of resources from individuals to the State, which given the way we hate paying taxes, clearly goes beyond our understanding of altruism.

What we need is not debt-forgiveness. What we need is quality leadership that firstly accepts the proper definition of the problems that are hampering our growth potential well below our capacity, the formulation of an effective curative programme that spreads the pain of adjustment fairly to avoid particular sectors being crashed by the adjustment whilst other sectors stay exempted from participating in the unavoidable pain, and finally the execution of such programme with single-mindedness and enthusiasm towards the final goal which makes the pain en-route bearable and acceptable.

The world needs to make poverty history. Malta needs to make history the incompetent leadership that is denying us from exploiting our true potential in the global world.